Comfortable vs modest retirement

One of the most obvious questions asked when planning for your retirement is what level of comfort you want to enjoy in your golden years.  To know what constitutes “comfortable”, Westpac/ASFA publish a survey as a guide to what the average person spends per year.

The survey assumes home ownership and shows figures for a ‘modest' and ‘comfortable' lifestyle for singles and couples.  A modest lifestyle means better than just surviving on the age pension but still only being able to afford fairly basic activities.  Comfortable means being able to afford a broad range of leisure and recreational activities, private health insurance, a reasonable car, good clothes, a range of electronic equipment, with domestic and occasionally international travel.

The figures for singles and couples in December 2012 are shown in the table.

Over the last four years, the costs of basic budget items such as food and petrol have had the most impact on spending.  With the maximum age pension for singles being under $19,076 and for couples $28,756 the figures are a powerful incentive to maximise your own savings.

It's never too early to start planning for your retirement.  Speak to your financial adviser to discuss the options available to ensure you don't miss out on your desired retirement lifestyle.